This Tax Season is a bit more complicated for the 16% of Americans who bought and sold cryptocurrencies recently.
Even for the casual crypto trader, tax requirements can be complicated to navigate. “Crypto investors are generally trading on multiple exchanges and using wallets to facilitate transferring funds,” said the team behind BearTax. “All of this requires that they map related transactions together so that gains and losses can be accurately calculated and reported on. Historically, this was done manually using spreadsheets — both time-consuming and full of potential errors — especially as you scale to tens of thousands of transactions.”
Co-founder Vamshi Vangapally lives in Atlanta and has been building up BearTax as a SaaS platform to streamline data needed for important tax information.
The most popular exchanges for crypto trades are Coinbase, Binance, and Crypto.com, but more mainstream mobile payment services have also entered the market.
Users import trades from the various exchanges holding crypto trades and BearTax automatically takes care of the capital gains calculations. That information is organized and can be sent to a user’s accountant or tax preparation software.
13,000 investors have used the platform to date.
Alongside Vangapally is a team largely concentrated in Seattle (where CEO Tela Andrews lives) and New York. And a new $3.2 million seed round, mostly from Seattle-based investors, is poised to help the platform expand and help more crypto investors.
Investors in the seed round include Ascend VC, BAM Ventures, defi.vc, Draper Startup House, Hustle Fund, Tacoma Venture Fund, Sketchnote Partners, Liquid 2 Ventures, and others.
This is the startup’s first outside investment.
BearTax told Hypepotamus that the seed round will be used to build out the marketing and engineering wings of the business.
There are many platforms competing to be the go-to crypto tax platform. But BearTax said its primary differentiator is that they are, by default, “built to be global.” The platform natively supports customers in the US, Canada, Japan, Australia, and India, with additional countries to be added on the horizon.